>> and joined by supervisor kim. our clerk today is erica and at sfgtv we have our staff. madam clerk do you have the announcements for us today. >> please make sure to silent all cell phones and electronic devices and speaker cards should be submitted to the clerk. items acted on today will be on the board of supervisors agenda unless . >> stated. >> we will excuse the commissioner. will you call income one please.

>> the sfo shuttle bus company at city and county of san francisco and provide services at san francisco international airport and through the airport commission. >> thank you for this item. we have kathy wieger from sfo. >> good morning. i am with san francisco international airport. the san francisco international airport is speaking your approval with sfo shuttle bus company to provide service for employees and passengers between the airport's terminals, long-term public parking lots and employee lots and garages for initial term of three years and seven moptds. the contract also has three two year options to extend . the proposed contract will provide management and operational services for shuttle buses at sfo between the parking facilities and our terminals and 365 days a year at a cost of approximately $39 million for the initial

term. sfo shuttle bus company will provide all the company, maintenance and repair as well as labor and materials necessary to keep the shuttle service going as well as furnish the drivers and mechanics and dispatchers. sfo shuttle bus company will be in charge of ensuring that all employees possess valid licenses and permits as well. this contract is the result of a request for proposal process with sfo shuttle bus company receiving the highest score of the two responses proposals. the airport agrees with the budget analyst recommendation to amend the legislation to reflect and not to exceed amount for the entire term or possible term of the contract, and i would be happy to answer any questions you might have. >> thank you very much. we don't have questions right now. why don't we go to the budget analyst report. >> madam chair and supervisor kim on page four of our report we report that the proposed

agreements average monthly cost of $871 for fiscal 2012-2013 2.6% more than the average monthly cost under the last 11 month of the extension of the existing agreement, and it is shown in table two on page five the cost of the proposed agreement includes a 2% annual average increase in cost and if all three of the two year options under the proposed agreement are exercised then the total not to exceed cost of the nine year and seven month agreement is $105 million so we recommend that you amend the resolution to include a not to exceed agreement and out of 105 million for that period of nine years and seven months

assuming again all of the three two year options are exercised and we recommend that you approve the resolution as amended. >> thank you very much. why don't we open this item up for public comment. are there members of the public that wish to speak on item one? seeing none public comment is closed. do we have a motion to accept the been analyst recommendation to insert language that is specified for the not to exceed amount of $105 million. >> motion to amend. >> all right and also to authorize the clerk to make those amendments. okay. we will take that motion without and to the under lying motion we will send that forward without objection. thank you. item two please. >> item two stion approving the fourth amendment between the treasure island

development authority. >> good morning. observe you today is talk about the our responsibility as caretaker. as you know for over 15 years the island has been under caretaker responsibility, and during that time the property is used -- utilized by us to lease the buildings at no cost to mass releases. indeed in september you approved mass leases for the waterfront, the child care center, lands and structures and the marina. in turn they use the properties to generate income through maritime and special use. today before you is the master lease for the fire academy and just like in you approved the forementioned leases this expires also and we

missed it earlier and it had a term of 15 years and i apologize for that and it would have been part of the september approvals. by doing this you extend to next year and for the purpose and they don't generate any income from this. this exceeds the threshold described this the charter and therefore requires your approval so i seek that this morning. >> thank you very much for that brief presentation. this item doesn't have a budget analyst report so i would open it up to public comment. any members of the public wish to speak on item two? seeing none we will close public comment. madam clerk does that conclude the items

before us? >> that concludes the items. >> thank you we are impossible. announcer: when you open a book, you can explore new lands... [bird screeches] meet new friends, and discover new adventures. there are amazing possibilities when you open your mind to reading.

[roar] you can log onto he library of congress website and let the journey begin. [horns honking] announcer: big dreams and good grades aren't enough to get into college. there are actual steps you need to take. finding someone who can help is the first and most important. for the next steps, go to knowhow2go.org.

>> good morning. and welcome to the budget and finance committee. my name is supervisor john avalos, the chair of the committee. joined to my right by supervisor jane kim and to my left by supervisor sean elsbernd. the clerk of the committee is mr. victor young and mr. clerk, can you share with us your announcements? >> please turn off all cell phones and electronic devices. items acted upon today will be forwarded to the full board of supervisors meeting of november 20th, unless otherwise stated. thank you. >> i wanted to acknowledge our sfgovtv staff who are work on this hearing.

that is nona and jesse larson. could you call our first item. >> item no. 1, resource approving and authorizing an agreement for the purchase of parcel of real estate located at 1550 evans avenue and 330 newhall street consisting of approximately 4.6 acres improved with 50,593 square feet of office and industrial buildings for the san francisco public utilities commission for a purchase price of $15 million, adopting findings under ceqa, adopting findings that the conveyance is consistent with the city's general plan and eight priority polices of city planning code section 101.1 and authorizing the director of property to executive documents make certain modifications and take certain actions in furtherance of this resolution. >> mr. updyke, welcome. >> so today we seek your positive recommendation to acquire one property that has

two addresses, 1550 evans and 330 newhall. the property at the corner of 3rd and evans. the southeast water pollution could control plant located in this area, so you can see the proximity. the aerial photo, i think does better justice to show that. the where my pen is and of course, obviously where the southeast plant is located. very proximate this particular property has been 2,000 square feet of land and contains buildings with 32,000 square feet of office space and 19,000 square feet of secure warehouse space. as i mentioned it's located at 3rd and evans.

it's an m-2, that is heavy industrial property zoning. and it's of course situated near that water pollution control plant. the cellar, 3rd and evans llc is controled by the among other things family who owned-and-operated morgan company on the site in 1978 and then leased are the property after those business operations cease ed the negotiated purchase price in the agreement [pr-u/] today is $15 million. the appraised value is $16 million. that value is predicated on an assumption that really all of the value of this property is in the land. it happens to have contributory interim use improvements. they are actually ideally situated for the sf pc use. on the overhead i have a list of the comparable sale used by

the independent appraisal for this property, ranging from $49 a square foot for over $100 a square foot in land. you can see they are very close by. hooper evans, newhall, oyster and 7 [*-fpbl/] street are [kpa-eurblg/]s. warehouse and office situation meets the needs quite well of the sfpuc so we can co-locate the staff, the equipment and the vehicles from several other locations into this one complex that is going to provide a much greater efficiency of operations for the sfpuc's wastewater enterprise collection systems division. this is detailed in the excellent budget analyst's report particularly in table 16 page 3 and table 2 of page 4 and i will let the budget am go into that into further detail. the total figure to be consolidated is about 134 and that is broken down by division

for you on those tables. upon move-in, we would like to also note the acquisition would yield savings of over 400,000 a year from lease terminations of 3801 3rd is street, and evans. the general plan conformity letter is in the board file. this matter is not subject to ceqa. i am engined today by a host of puc officials to provide any particular details about operations you might have. mr. carlin, miss russell, and others. so look forward to answering any questions that you might have. >> thank you. why don't we go on to mr. carlin just to augment your presentation, just to hear from the puc on how this land will be operationalized. >> thank you. chairman avalos and supervisors kim and elsbernd, miable karlin, deputy general manager for the puc this. is a unique opportunity for us to actually consolidate several operations

that we have in sort of different locations into one location. it gives us the opportunity to have those people in the same place, from our collection system, who do the testing of the streets to actually doing sewer clean-ups. it also allows us to expand and we're actually forward-looking with this piece of property as well. as we implement the sewer system improvement program we are going to locate some of the project management staff there that will be working on the southeast plant. so they will be there for decades, as we kind of redo that plant in the southeast sector of san francisco. so this is really an opportunity that we looked at and we want to pursue. and with your approval, we would actually move forward on buying this property. >> and then -- i mean the southeast plant is across 3rd street, correct? >> right. >> so what is the plan tentatively in place right now for how thatlant will be reconstructed is it -- it's going to be in the same vicinity, right? >> right. the footprint of the plant is looking at reconstruction of

the plant partially [stkph-euft/]ing footprint and potential potentially moving into some other properties that the city owns. the asphalt site and talking to public works about pushing our biosolids project against the berm of caltrain, along germ avenue. and so most of the work will be contained within the existing site with maybe some expanse moving across quince street at this point in time. >> thank you. colleagues any questions for the departments? we'll go on to the budget analyst, mr. rose. >> mr. rose, we're ready for your report. >> mr. chairman, members of committee, on page 5 of our report, the bottom of page 5, is shown in table 3 on page 6 of our report.

the cost of purchasing this property at 1550 evans and 330 newhall is $15 million. plus an estimated $1,179 in closing costs. so the total estimated cost is [shao-eubgt/]ly offer 15 million, $15, slight over $15 million. so from that standpoint, it looks like the city is purchasing the property at element a $1 million saving from the appraisal. on page 6 of our report. we point point out that the net present value of the existing leases, where they are now, including annual increases over 30 years, is an estimated $8.2 million. it so that the net present value including the relocation costs, the purchase price, and financing costs over a 30-years

is an estimated $18.1 million. therefore, the proposed purchase is $9.9 million, almost $10 million or 122% more than the cost of the existing leases. however, as has been stated the purpose of this purchase is to consolidate in one central location. the sewer system improvement program, staff and equipment, as well as the wastewater collection division. now on the othered and, we point out on page 7 of our report that if the puc were to lease instead of purchase comparable property, new properties, to get a centralized location, then it is shown in table 4 on page 8 of our report the net present value of such lease is over 30 years is an estimated $23.1 million, which is $4.9 million

or 27% more than the net present value of the estimated purchase price/relocation and occupancy costs, as well as the financion costs over a 30-year period that. would be an estimated $18.1 million. so our our conclusion because it includes new costs for the pucks, as compared to continuing to lease at the existing locations, therefore, we say it's a policy matter, even though we acknowledge that if the supervisors agree with the department to centralize in one location, it appears that the city would be getting a good deal. >> thank you, mr. rose. sean? >> mr. rose, and maybe this is puc too, and maybe you might not know harvey, the current lease analysis that you did, if we kept it for 30 years, what are the current terms of lease?

do we have those leases for the next 30 years at the same rent? >> no, we made a projection. it's a combination of leases and city-owned property. and we simply made a projection to get a net present value. >> okay. so it's an expectation of 15 years from now what the property owner would be charging the city. >> exactly. >> fair enough. ? >> supervisor kim? >> thank you. i do have a quick question for mr. updyke from real estate. and it's actually just a tangential question. with regards to the two sites with the fire department and with dpw that the puc will no longer be utilizing and i nose it's not a cost-savings to the puc because they weren't paying to use it. are there ways fort departments to generate revenue

from the sighs now that the puc will no longer be occupying it? >> supervisor kim with respect to the property particularly that is associated with fire, i believe that [shr-r/] in discussion amongst dpw, my staff and capital planning. so i think we're looking at reuse, where possibility, where we're vacating or pulling certain uses off city-owned property s. >> so i'm sorry for 2245 gerald? >> that would be gerald. >> so the fire department may reuse that site now? >> yes. >> it would be great to learn how we reutilize sites or see if there are ways of generating -- i don't know if they are releasable. >> we're looking at a broader

picture of all the industry yard needs that the city has. they are quite numerous. this board deliberated over an issue recently with the mta, that i think brought to light some of the challenges that we have to find industrial uses. there is only so much within the city footprint and we're looking can we con sodate the uses to have search for a whole number of options. so we're having those discussions to have a consolidated discussion going forward and i execute [spwr-eubg/]ing something forward to you to discuss that. >> thank you. >> let's open the item up for public comment. any member of the public who wishes to comment, please come forward. seeing no one come forward, we'll close public comment. colleagues, we have this item before us. can we have a motion to approve this resolution and send forward with recommendation. >> so moved. and we can move forward as a committee report for the

tuesday meeting? okay. we'll take that without objection. >> that will be forwarded as a committee report to the november 6th board of supervisors' meeting. >> very good. item no. 2, please? >> item no. 2, resolution authorizing the director of the mayor's office of housing to execute a local operating subsidy program grant agreement with 220 golden gate master tenant lp to provide operating subsidies for formerly homeless single adults at kelly cullen community, 220 golden gate amp for the period of december 1,2012 to november 30, 2027 napolit not to exceed $18,475,118. >> very good. we have the mayor's office of housing. good morning, supervisors. i will dot introduction and then lydia ely from my office, who is the project manager will give you the details. we are here to seek the

committee's recommendation on this local operating subsidy program contract. this is a continuation of our collaboration with the city's department of public health, where the mayor's office has provided capital for the development of affordable housing, and we are working with the department of public health to basically subsidize the operation of the facility. so that the department can ensure that it can meet its goals of serve formerly homeless medically-frail individuals. and this project is just one in a series of projects that we're doing with the department of public health. we're also doing similar projects with the human services agency and this projected is a 15-year contract

for the operating subsidies for the kelly cullen community facility. and i will bring up lydia ely to talk about the details of the particular project and the subsidy itself. >> good morning supervisors, lydia ely, project supervisor at the mayor's office of housing. i wanted to talk about the local subsidy program and its genesis and goals before we talk about kelly cullen community and the specificked of that project. the local operating subsidy program has been operated by our office since 2005. and it was created out of a need -- out of the recognition that we needed a local source for operating supportive housing. the ten-year plan to abolib chronic homelessness, which was drafted in 2004, set a goal of 3,000 units for formerly

homeless people. however, we did not have a local source to keep those units -- to operate those units in the long-term. federal sources such as section 8, shelter plus care, were scarce and have become even more scarce since that time. so the local operating subsidy program supports operating costs -- only when no other subsidy is available. right now, in the 2012-2013 fiscal year, we're operating 1027 units, across projects in the city. in 17 different projects. most of those units are for single adults. however, we do have 111 units for families. the project is based on the concept that providing housing is not only more humane, but faze it's also more cost-effective than providing

inertia or leaving people to the streets. we find savings in public health care costs and the emergency health care system and wait the program as mr. lee explains these are general funds. and we underwrite the contracts and implement the contracts and monitor the contracts. >> was there -- just when the program was established in 2005 -- what were the sources that general fund dollars that came from? was that both from hsa and dph? >> yes, it was. the first project was the hotel essex and that was an hsa project. i would say at this point, i don't have it in front of me, but i would say about two-thirds of the units are dph units and one-third are hsa units. >> you say we created a funding stream for it, but

basically we just took general fund dollars and call it local operating subsidy program dollars now. what was not funded? what were those dollars potentially used for before that? was that ga? hsa? and something else dph is trying to get background on the program itself. honestly, i don't know. with the overlay being this is a prudent use of -- preferable to emergency services and the costs in the best of all worlds would be the dollars -- the best all worlds would be emergency services dollars that were no longer used. i'm not sure if that is actually happening in the real world. >> so we might be able to describe some cost-savings by having a program that has the services where people live and actually yields greater cost-savings that could be a